Tribune News Service
New Delhi, November 25
The Union Cabinet on Wednesday approved the merger of Lakshmi Vilas Bank (LVB) with DBS Bank India Ltd (DBIL) and said there would be no further restrictions on withdrawal of deposits from Friday.
LVB was under moratorium for 30 days. The RBI also appointed an administrator to protect the depositors’ interest.
Union Minister Prakash Javadekar said the move would provide comfort to 20 lakh depositors and protect the services of 4,000 employees.
After inviting suggestions and objections from the public and stakeholders, the RBI prepared a scheme for the bank’s amalgamation for the government’s sanction ahead of the end of the moratorium period so that restrictions on withdrawal are minimised.
DBIL is a banking company licenced by the RBI with a strong balance sheet and has the advantage of a strong parentage of DBS, a leading financial services group in Asia with presence in 18 markets and headquartered and listed in Singapore. The combined balance sheet of DBIL would remain healthy even after the merger and its branches would increase to 600.
The speedy amalgamation and resolution of the crisis in LVB is in line with the government’s commitment to a clean banking system while protecting the interests of depositors and the public as well as the financial system.
The Cabinet also approved equity infusion of Rs 6,000 crore in NIIF Debt Platform sponsored by National Investment and Infrastructure Fund (NIIF), comprising Aseem Infrastructure Finance Limited (AIFL) and NIIF Infrastructure Finance Limited (NIIF-IFL).
This was one of the 12 key measures announced by Union Finance Minister Nirmala Sitharaman as part of the government’s Aatmanirbhar Bharat 3.0 announced on November 12.